Tuesday, December 3, 2013

How Much Does It Cost to Insure My Car?

How much does it cost to insure my car is a very common question.  Some people are under the impression that it cost the same just because we own the same type of vehicle.  That is not the case.  Thousands of factors go in to the calculation on how much you pay for car insurance.  I am going to go over a few of the key items with you.

  • What kind of car you drive:  Year, Make, Model for starters.  Most of the other features will come up automatically by your vehicle identification number (VIN). For example: anti-lock breaks, air bags, alarm, VIN etching, automatic recovery options, etc.
  • Where you live: This surprises most people when they find out that they pay more money for car insurance if they move.  Most of the time the rule of thumb is auto insurance is more expensive if you live in the city.  Detroit for example is one of the most expensive cities for car insurance.  
  • How old you are:  If you are under the age of 25, you are considered an inexperienced driver.  If you are over 55, you receive a discount.  However, in some cases a 55 year old can pay the same amount for car insurance as a 25 year old.  Every situation is unique.
  • Your driving record:  Any tickets, accidents, claims or suspensions will affect your driving record for at least 3 years.  Most companies look back as far as 5 years, but only surcharge your policy for at fault accidents for 3 years. 
  • Other drivers:  Not only will the number of drivers of your particular vehicle affect how much you pay for auto insurance, but also if there are other licensed drivers in the household.  Even if they have their own vehicle and insurance, if a licensed driver lives with you, you should list them on your policy.  There is usually a very small surcharge added if they do have their own vehicle and insurance.
  • Coverage options: There a several different coverage options within each type of coverage and then several coverage combinations as well.  Do you want liability only?  NYS minimum coverage is 25/50/10.  $25,000 per person limit for bodily injury and $50,000 available for the total accident, and $10,000 for property damage.  This coverage protect you, but pay for someone else's (not in your vehicle) bodily injury or property damage.  Higher limits are available and combined single limits are available also.  Talk to your insurance agent to determine what options might be best for you.  
  • Physical damage:  Do you want physical damage coverage available for your car?  This means comprehensive or collision.  Comprehensive coverage pays for your vehicles damage from those things that are out of your control, for example:  vandalism, theft, hail, falling objects, fire, a deer hits you. Full glass coverage is an option, in which you may choose and no deductible will apply to this coverage. Collision is when your vehicle collides with any other object: you hit a tree, a pot hole, hit and run in a parking lot, or another vehicle. Comprehensive and collision coverage pays for the resulting damage to your vehicle subject to your deductible.
  • Optional Coverage:  There are still more options to consider, towing & labor or perhaps rental reimbursement.
  • There are several more factors as well, your credit score is very important too.

This is a lot of information to digest.  These are the basics to help you make an informed decision as to what you may want or need.  Having a conversation with a licensed agent it the best way to make your final coverage decision.  We offer free insurance reviews.  We also offer lots of great advice in our research center.  As always, if you have questions or need more information, feel free to contact me.


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